Mortgage tax cuts to be reduced from 2022. What is the impact on the housing market? ~ Current affairs commentary. LIFULL HOME'S PRESS will send out the latest trends in housing and correct housing information by experts [LIFULL HOME'S PRESS]

Mortgage tax cuts have been implemented for many years, changing designs

The deduction rate will change from 1% to 0.7%, but ...

On December 10, 2021, the ruling party tax system investigation committee (hereinafter referred to as the ruling party tax system) announced the tax system revision outline for the next fiscal year. The annual tax reform outline is approved by the Cabinet in early December after deliberation of the government tax, and passed and passed by the ordinary Diet (Finance and Finance Committee, Finance and Finance Committee and plenary session) in January of the following year, and then April 1st. It will be set up to be enforced from the day. Since there have been no major changes in the ruling party tax report in the past, it can be said that the direction of this ruling party tax report is basically determined. As is already clear from the media, the mortgage tax cut will change significantly in 2022. The mortgage tax cut, which has been expanded by the consumption tax increase measures to 10% and the corona measures in recent years, will be reviewed in the direction of being reduced.

2022 mortgage tax cut

The specific changes are as follows.

2022年度から縮小される住宅ローン減税。住宅市場への影響は? ~ 時事解説。LIFULL HOME'S PRESSは、住宅の最新トレンドや専門家による正しい住宅情報を発信していきます【LIFULL HOME'S PRESS/ライフルホームズプレス】

① Reduce the tax deduction rate for mortgages subject to tax reduction from 1% to 0.7%
(2) The upper limit of the year-end principal of the mortgage deduction will be reduced from 40 million yen to 30 million yen for general housing (50 million yen for certified housing, 45 million yen for ZEH housing, and 40 million yen for energy-saving standard compliant housing. To provide)
③ Lower the upper limit of annual household income that can utilize the mortgage tax reduction from 30 million yen to 20 million yen
④ The tax reduction period will be 13 years for new homes (specified that there is a review) and 10 years for existing homes.
⑤ The area of ​​the house that is only applicable to new houses should be 40m2 or more (household annual income upper limit of 10 million yen).
⑥ The gift tax exemption limit for gifts of funds for the purpose of purchasing a house will be extended for two years, and the upper limit will be reduced from 15 million yen to 10 million yen (after January 2022).

What is the impact on the housing market? What do you think about replacement by purchase?

The mortgage system is an important economic stimulus measure for the country, and although the extension of the system for four years was specified this time, the system itself will be shrinking. This is primarily pointed out by the Board of Audit regarding the 2021 tax reform outline, despite the fact that mortgages have ultra-low interest rates, a 1% deduction will result in a "reverse zaya" with a refund of more than the interest burden. It is a measure that received that. According to a survey, the top respondents were "low mortgage interest rates" and "attractive mortgage tax cuts" as financial factors that motivated home purchases. The reduction of the loan tax reduction system will have a great impact on the sales of homes. The reason why house prices are stable in the Corona disaster is that the "three-piece set" of low interest rates, loan tax cuts, and gift tax exemption is effective, but when two of them are reduced, 2022 It is expected that relatively large changes will occur in the market, such as the decline in housing prices after April 2014, the slowdown in the number of supplies and distributions, and the “rush demand” by the end of March. On the other hand, there are statistics from the Ministry of Land, Infrastructure, Transport and Tourism that the number of houses that meet the energy-saving standards, which are newly specified as being subject to the mortgage tax reduction, currently exceeds 70%, and there is a view that it will not be significantly reduced as a result. What kind of impact will the "reduction" of the mortgage tax reduction system from next year have on the housing market, and how to think about home purchases and replacements after 2022, with finance? We heard the opinions of experts who are familiar with the housing system.

Content that addresses issues such as environmental friendliness and lifestyle.It does not lead to factors that worsen market conditions-Mr. Goro Muro

Goro Muro : Engaged in real estate securitization-related business at a financial institution think tank since the early days of J-REITs. Currently, he is engaged in real estate investment market, low unused real estate revitalization, disaster area reconstruction town development business, station area redevelopment, research and consulting work related to existing housing distribution at Value Research Institute Co., Ltd.Visiting Researcher, Economic and Social Research Center, Reitaku University

In December 2021, the outline of the tax reform was announced, but it was decided that the mortgage tax cut would be extended for four years under certain conditions. The deduction rate dropped from 1% to 0.7% regardless of whether it was new or used, but the deduction period was extended from 10 years to 13 years. A certain evaluation can be made from the viewpoint of alleviating the so-called reverse Zaya problem and correcting income restrictions. In addition to relaxing the age requirement for existing houses from "fireproof houses within 25 years, non-fireproof houses within 20 years" to "houses built after 1982 (new earthquake resistance standard)", the floor of new houses Relaxing the area requirement to 40 m2 or more is also considered to be a measure in response to the demands of the times. In particular, regarding area easing, the analysis result of the "Survey on the existing housing supply and demand model" by the Real Estate Distribution Management Association (FRK), which we cooperated with, shows that the supply and demand gap (the area zone desired by the demand side is the existing stock). It has become clear that there is a shortage), and it is expected to stimulate potential demand by responding to changes in household composition and lifestyle. Other than these, the major points are probably various mitigation measures according to the environmental performance of the house. For housing that considers environmental performance such as certified housing, the borrowing limit is added (50 million yen. General new housing is 30 million yen) and the deduction period is extended (13 years. General new housing is 10 years). There is a clear difference. Considering the actual deduction amount, the maximum deduction amount is 4.55 million yen for newly built certified housing (long-term excellent certified housing, certified low carbon housing) with the largest deduction, while it is 273 for newly built general housing. It will be 10,000 yen, and the difference can be calculated as 1.82 million yen. In addition to this, there is also energy-saving housing subsidy that costs up to 1 million yen for child-rearing and young couple households, and it can be expected to dig up potential demand. Supply-side efforts are also underway. Each company is promoting the supply of smart houses, and it can be seen that each company has already shifted from the expansion route to the standard specifications. In the decarbonization trend, it is highly likely that this trend will continue in the future. In addition, it is expected that the lending attitude of banks will be affected in the medium term, and it is highly possible that whether or not they are environmentally friendly will affect price formation. In general, environment-friendly housing has been avoided due to its high initial cost and high running cost such as equipment renewal. As in the case of Mitsubishi Estate's MEC Industry, it was shown that the efficiency of the entire timber supply chain leaves the possibility of building cheap housing. We expect that promoting the supply of cheaper (and higher quality) housing, including these efforts, will lead to the discovery of potential demand and the growth of the market (which will also target lower-income groups). ..

Changes in business selection such as complicated tax reduction system-Mr. Masanori Takahashi

Masanori Takahashi : Real estate consultant, CEO of Value Housing Co., Ltd. For the first time in the industry, he will introduce a "housing resume" for all properties handled and work to maintain and improve the asset value of the customer's property. He also runs the VC "Sale Window ®", a real estate company that correctly evaluates and distributes each used home (building). He has contributed to various media.His books include "What you need to know right now so that you don't have to worry about disposing of your parents' house" (Kanki Publishing).

The problem of "reverse mortgage tax cuts", which has been pointed out for a long time, has finally come to the fore. The tax cut system that started in the 1980s to support home purchases has become permanent in a sense, and especially under the recent low interest rates, the system is such that money returns more than the interest rate paid, and we have taken a step toward correction. It can be said that "2022 version mortgage tax reduction". However, it is not just a correction, but a new message from the country is read because the tax system has become a tax system that adds the difference depending on the "performance" of the house, which is "decarbonization" and "carbon neutral" that Japan is aiming for in the future. be able to. By the way, although it is a specific difference from last year, the mortgage loan limit for so-called general housing (classified as "other housing") due to the superiority or inferiority of the tax reduction amount due to the energy saving performance etc. The amount has been reduced from 40 million yen to 30 million yen. In addition, the tax deduction rate for all homes has been reduced from 1% of the year-end loan balance to 0.7%. However, the tax reduction period has been unified to 13 years, which is easier to understand than last year (however, "other housing" is 10 years after 2024). However, this is only for new homes and properties purchased and resold by homebuilders, and existing homes, so-called pre-owned homes, have an upper limit of 20 million yen and remain for 10 years, just like last year. Here, I would like to dig a little deeper into existing housing. The upper limit and period will not change, but the tax deduction rate has dropped to 0.7%, so the maximum deduction amount for 10 years will be reduced from 2 million yen to 1.4 million yen. Specifically, it is a tax reduction system up to last year for the total amount of interest paid in the first 10 years when the interest rate is 0.5% and the repayment is 35 years, assuming that the annual income is such that the full deduction amount is returned. The turning point when comparing the upper limit of the tax reduction amount for 10 years (2 million yen) when 1% of the year-end loan balance returns is 46.1 million yen. In other words, in the case of borrowing up to 46.1 million yen, the amount returned by tax deduction could be larger than the total interest paid in 10 years. However, if it becomes 0.7%, the turning point will drop to 32.2 million yen, and if the amount of borrowing is less than this amount, it will be calculated as before last year, but if the amount of borrowing exceeds this amount, the interest expense will be higher. .. However, even if it increases, the return range of the interest rate that should be paid has decreased, and not everyone will lose ... However, this is the case when a loan is taken alone. Yes, if it is a pair loan that two people, such as a married couple, who are said to have more than doubled in the last few years, receive a loan, the benefits will be obtained by receiving a tax reduction for each of them, depending on the income tax paid. It is possible to increase. Finally, one of the newly started systems is the "Children's Mirai Housing Support Project". This project supports the acquisition of housing for child-rearing households and young couples, and meets the conditions that one of the couples has a child under 39 years old or under 18 years old, and energy saving etc. like this mortgage tax reduction. By meeting the standards, up to 1 million yen will be subsidized for new construction. In addition, if it is an existing house, it is often remodeled after purchase, but if the same conditions are met for this work, a maximum of 600,000 yen will be subsidized. Especially for remodeling, there is no age limit or the condition of having a child, and if the house to be purchased is a "safe R house", there is a surcharge. Including this tax reduction system, the mechanism of such subsidies is becoming more complicated year by year. In reality, it seems that the understanding of business operators has not caught up. It is even more difficult for consumers to understand everything, and I hope that by asking these questions when choosing a business, it will be one of the criteria for determining the attitude of the other party.

The system is only a "trigger" -Mr. Tomohito Yabe

Tomohito Yabe : Representative employee of RRP (RRP LLC), a limited liability company. Visiting professor at Toyo University Graduate School of Public-Private Partnership. Craft Bank Soken Fellow. He is the director of Recruit Housing Research Institute and a management consultant company officer for the construction and real estate industry before assuming his current position.Active as a partner that contributes to regional revitalization by revitalizing the community-based construction and real estate industries, connecting the industry with the government and regions through PPP-like initiatives

Reduction of mortgage deduction rate (from 1% to 0.7%), reduction of year-end principal limit (from 40 million yen to 30 million yen for general housing), extension of deduction application period from 10 years to 13 years We do not believe that the main change in the mortgage tax exemption system will have a "rapid" and strong brake on housing market trends. However, we may have to be prepared for a gradual slowdown.

What are the majorities affected by the system change?

If you read the fact-finding survey on mortgages by the Ministry of Land, Infrastructure, Transport and Tourism and the Japan Housing Finance Agency, for example, 73.2% of households using mortgages will fall from more than 4 million yen to less than 10 million yen (April 2020 by Japan Housing Finance Agency). (Monthly announcement survey), and it can be seen that the average amount of new loans is calculated to be 24.8 million yen (FY2 mortgage survey by the Ministry of Land, Infrastructure, Transport and Tourism). Of course, these are separate surveys, and it is quick to capture the "image" of households using mortgages based on the figures, but if you are aware of the speed, you have a loan balance of 30 million yen or more (or will make one) in the first place. Households cannot be called the majority in the market. In addition, regarding the reduction of the deduction rate, we think that there is a buffering effect brought about by extending the deduction by 3 years. There are some doubts about the effect of the extension because it seems that there was already a three-year extension of the deduction that was implemented as a mitigation measure for the consumption tax increase, but the provisional measure is more than the deduction amount based on the loan balance. Considering that the deduction "standards" were different, such as when a lower amount was applied, it cannot be said that the extension of the deduction period with the same standard for the entire period cannot cover the deduction rate reduction at all.

The system should only be a "trigger"

The above view is the background to think that there is no effect of applying a strong brake to "rapidly", but such a story is "reason" for system designers or sellers, and not so much for home buyers. It's an irrelevant story. Of course, I think that low interest rates and tax incentives will be a "trigger" and "boost" for purchasing consideration and decision making, but the purchaser does not decide to purchase because of these conditions, but at the timing necessary for family life. I just decided because I decided that the purchase was worth the purchasing power (payment ability). In the first place, if you trace the transition of the mortgage tax reduction, it was originally understood that it was an "investment tax reduction" income deduction measure for individuals, but it was "industrial guidance" and "market creation" that led to the expansion of domestic demand. There is an aspect that has changed to a housing acquisition promotion tax system that includes the intention. This is reflected in the deferment of the year-end principal standard and the establishment of a new standard for high-performance housing such as ZEH in this system change. It seems that the system change is centered on "reason" for system designers or distributors. I feel that there is some discrepancy between the image imagined from the annual household income and average loan amount of loan users seen at the beginning and the various standards after the system change. Perhaps this is because there is a discrepancy between the criteria for "industrial guidance" and "market creation" and the criteria for purchasing decisions by buyers based on their awareness of their ability to pay. And I think that this "deviation" may bring about a state where a gradual deceleration continues slowly.

The impact on market trends is higher than the price change

Although it deviates a little from the purpose of "thinking about the impact of system changes", I think that the impact of soaring real estate prices, which reflects the rise in prices of building materials, will have a far greater impact on future market trends. .. Soaring home prices change buyers' purchasing criteria in proportion to their ability to pay. In a market where property prices are already expected to rise due to soaring materials and adaptability to higher performance, customers will not be able to follow just by communicating that "it is time to buy because there is a system."

March 07, 2022 11:00

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